Giancarlo Nicastro: Our data shows that for the past five quarters, Faria Lima has demonstrated negative net absorption. How do you evaluate the region's performance?

Ricardo Betancourt: I think there are some signals behind this. The first is the macroeconomic environment we are living in; the truth is that Brazil's current situation is not very inspiring. We do not expect a significant improvement anytime soon.

Now, speaking about Faria Lima itself, one of the differences is that if you look at the price increase charts, you can see that the rest of the market hasn't kept up with the region. So, we might be at a point where the gap between Faria Lima and other market regions has widened.

Some sectors and companies need to be in Faria Lima for image reasons. Others do not. For instance, consumer goods companies might find it okay to be in Faria Lima when times are good, but when the market becomes challenging, they start cutting expenses and may find they don't need to be there. We've seen several non-core financial companies that had their moments in Faria Lima and then left.

GN: The market average is R$ 100/m², but in Faria Lima, this value jumps to R$ 300/m². In your view, how do tenants perceive this, and is it worth it?

RB: We have experienced cases where tenants insisted, ‘I need to be in Faria Lima.’ Such tenants will pay whatever Faria Lima demands at that moment, as it is a status symbol. Often, we counter with good alternatives in slightly more distant regions.

Even large financial companies find paying between R$ 250 and R$ 300/m² unsustainable. In our current situation, times are leaner. Returning to the macro view, when everything is growing and doing well, sometimes excesses go unnoticed. But now, we're entering a phase where every saving counts, with high-interest rates and various difficulties. Many companies can no longer afford to pay these high prices when they know a nearby region offers half the price.

GN: Ricardo, have you noticed a decentralized demand? Much has been said about one central region and several smaller hubs across the city. Which regions do you see demand today?

 RB: Well, I think Faria Lima will always have the classic demand, especially from the financial market and large law firms. But now we have new regions receiving new developments, which naturally attracts companies. For example, the market has expanded towards the Chucri Zaidan area, especially around the Rochaverá complex.

Overall, São Paulo has had few new deliveries historically over the past ten years. This low supply has kept vacancy rates low and prices competitive. So, punctual deliveries of more modern, high-standard buildings with environmental certifications—these are very necessary today—will attract new companies.

GN: Speaking about decentralization, could other regions, such as the East Zone, develop and start attracting large companies?

RB: I believe the East Zone will take time to establish itself as a more important region; for now, there are only some punctual occupancies. However, given the large population there, service companies, like back-office areas, can function very well in the region. But they shouldn't start building ten buildings at once. With a more paced delivery, companies can take advantage of the large population in the East Zone.

GN: Let's talk a bit about office trends. We hear a lot about boutique offices, which is still a somewhat nebulous topic. I'd like to know your view on this.

RB: I think there are two main points for boutique offices. The first is a good location; having a boutique office in Santo Amaro, for example—nothing against Santo Amaro, I am from there—doesn't make sense as it's a classic office market region.

The second point is that boutiques should have a size limit; if it exceeds 6,000 or 7,000 square meters, it’s no longer a boutique but a normal office building. A boutique is designed to have one or two occupants and be exclusive. So, it needs to be in a well-located area, like Rebouças, a few blocks from Faria Lima. There are already buildings with this concept there, mostly occupied by a single company. This is the concept, these are the characteristics, and I think they have everything to succeed.